State in middle of suit over formula for 5-Hour Energy

Thursday, June 20, 2013 at 10:05pm
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For the past several years, the popular energy drink 5-Hour Energy has been under intense scrutiny by the advertising watchdogs due to its marketing claims.

A filing in Davidson County Chancery Court last week revealed that the state of Tennessee, through the Department of Commerce and Insurance, and the Office of the Attorney General and Reporter, is involved in a 33-state investigation into the drink and several of its advertising claims.

The lawsuit, filed by the companies that own 5-Hour Energy, asks for a declaratory judgment from a chancellor that will effectively block Tennessee from obtaining the recipe for the drink.

The multistate civil investigation centers on an advertising campaign from 2012, a 5-Hour Energy spokeswoman said. According to the lawsuit, Tennessee is also on an “executive subcommittee” composed of five states that have expanded the investigation to include the drink’s “no crash” claims.

A spokeswoman for the state attorney general confirmed the investigation but declined to comment on further details. She said the state would file a timely response to the lawsuit.

The Tennessee Department of Commerce and Insurance referred comment to the Office of the Attorney General, but said there had been no citizen complaints filed against 5-Hour Energy in Tennessee.

5-Hour Energy, which is marketed in distinctive 2-ounce bottles, was first introduced to consumers in 2004. The company now claims to sell more than 9 million bottles per week.

The small bottles contain 200 milligrams of caffeine, according to the company. (By comparison, a 12-ounce cup of Starbucks coffee has 260 milligrams of caffeine.) But the company has received criticism from the National Advertising Division, an arm of the Council of Better Business Bureaus.

The crux of the criticism from NAD — and now the 33-state investigation — centers on 5-Hour Energy’s “no crash later” claim. The drink consistently touts its energy-boosting effects in television commercials and in-store advertising, claiming that the drink doesn’t cause a quick crash like other beverages or supplements. The company maintains that the “no crash” claim refers to “no sugar crash.” The drink doesn’t contain sugar.

Tennessee requested documentation about 5-Hour Energy from its parent company, Living Essential Inc. The lawsuit filed against the state claims that Living Essential provided documents related to an NAD investigation, but they redacted the amounts of ingredients.

Divulging the recipe and makeup of the energy drink could put one of their “most valuable assets” at an “unwarranted risk of disclosure.”

The suit was filed to protect the “highly confidential trade secret information” that could be obtained if the states received the exact recipe for the energy drink. NAD, a private entity, is not subject to open record laws, the suit claims.

But the executive committee — which also appears to include Oregon, according to the Salem, Ore., Statesman Journal — has continued to press for the unredacted documents.

Living Essential entered into a confidentiality agreement with the states regarding the investigation that would keep proprietary information safe, but the company maintains the agreement doesn’t go far enough to protect the sensitive information contained in the recipe.

The company said it would suffer “irreparable harm” if the information were disclosed.

“In this electronic age, someone could publish it ... and once it’s out, it’s out,” 5-Hour Energy spokeswoman Marla Rae said. “So what the company is attempting to do in each of the states is make certain that it can protect this very valuable asset.”

The lawsuit also asks for an injunction preventing the state from obtaining the specific ingredient amounts.

The initial state investigation examined a commercial released last year that features survey results from primary care physicians answering questions about the drink.

According to the commercial, 73 percent of the physicians “would recommend a low-calorie energy supplement to their healthy patients who use energy supplements.” Fifty-six percent of the respondents would specifically recommend 5-Hour Energy, the commercial claims in small print on the screen.

The ad sparked a negative reaction, with numerous websites calling the information “misleading” due to ambiguous wording.

The state has 30 days to respond to 5-Hour Energy’s lawsuit.

3 Comments on this post:

By: on 6/21/13 at 7:56

It would seem that the FDA or CDC should have some way to stop this.

By: gid on 6/21/13 at 8:28

Did Coke release their contents? What about KFC and the 'locked up and guarded receipe' ?

By: dargent7 on 6/21/13 at 1:52

200mg of caffein in that little btl.? Say no more. It's a gimick and Starbucks 12oz doesn't have 260 mgs. Probably just 200.